A1 Telekom Austria Group

Bulgaria

A1 Bulgaria

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In 2019, the Bulgarian market showed positive trends, both in the fixed-line and in the mobile segment. Strong growth in the fixed-line business segment was attributable to the increased sale of customized corporate solutions, while successful up and cross selling to residential customers also contributed to the growth. Exclusive TV content featuring sport channels made a significant contribution to ARPL trends and the positive revenue generating unit (RGU) development. Total fixed-line RGUs increased as the strong trends in TV and broadband were able to offset the decline in fixed-line voice services. The mobile segment was characterized by market stabilization and improved trends among both business and residential customers. The total number of mobile contract subscribers however declined, mainly as a result of cleaning up inactive SIM cards in the year under review. Successful upselling in postpaid and pre-paid segments contributed to the positive ARPU development.

Total revenues increased by 9.2 % year-on-year with growing fixed-line and mobile trends as well as equipment revenues. While mobile service revenues increased on the back of up-selling activities and market stabilization, fixed-line service revenues rose due to strong demand for TV content and customized corporate solutions. Equipment revenues grew owing to higher quantities sold.

Costs and expenses increased, driven primarily by higher cost of equipment as a result of upselling activities and increased smart handset sales in the mobile segment as well as, although to a lesser extent, due to higher sales in the fixed-line segment. Increased content costs, in line with the higher number of TV RGUs, together with higher workforce and IT maintenance costs, were additional key factors for increases in costs.

Strong growth in service revenuesmore than outweighed higher costs and expenses, resulting in 12.5 % EBITDA growth year-on-year. Depreciation and amortization declined by 57.8 % as the rebranding in 2018 led to brand amortization costs of EUR 144.0 mn. As a result, operating income increased in the year under review and amounted to EUR 66.9 mn (2018: EUR –106.8 mn).